Trading Week Analysis for 07/05/2012

Note: I have posted 2 reviews today, Saturday 05/05/12; My Indices Review and my Trading Week Analysis.  Only one e-mail alert will be sent though most likely.  Please make sure that you read the Indices Review so that you understand my perspective for the week.

Sentiment turned to ‘risk off’ last week and accelerated after Friday’s NFP result. I will be cautious if trading 'risk off' this week though as there seems to be a bias to trade 'risk on' where ever possible and on the slightest hint of any positive news.

E/U: Price broke down from a bearish ascending wedge pattern during the week and fell through the 4hr 200 EMA. Price continued to fall after NFP. Price is still trading within a bearish descending triangle pattern with the 1.3 level forming the bottom trend line. I don’t have a TS short signal on the 4hr yet though. Price is looking bearish though but there is still the possibility for the bullish inverse H & S to evolve on the monthly chart.

I will look to SHORT the E/U on any new TS signal and will look towards potential trend line breaks at the 1.3 level if ‘risk off’ sentiment remains.

I will look to LONG the E/U if ‘risk on’ sentiment returns and on any new TS LONG signals.

E/J: The bearish Head and Shoulder pattern seems to have evolved on the daily chart and the neck line was broken on Friday.  I have had a new TS signal to SHORT on the 4hr chart. There was also the chance though to catch a trend trade signal off this pair from the shorter time frame 15 min charts after the NFP news if you were able to trade during the US session.

I would look to LONG the E/J on a new TS signal and if price breaks, closes and holds back above the broken neck line and 105 area if 'risk on' returns.

I might be tempted to SHORT the E/J as I have a new TS signal to SHORT on the 4hr. I would like a bit of a pull back to the neck line though (about 65 pips) so as to reduce any risk on such a trade.

A/U: This pair is looking bearish. Price has broken below the daily bear trend line and I now have a TS signal to short from the 4hr chart. This signal was slow in evolving though. There was the chance to catch a trend trade signal off this pair from the shorter time frame 30 min charts after the NFP news if you were able to trade during the US session.

I won’t chase this SHORT trade though as it has moved too far from the trend line break, some 100 pips away.  I will wait for a new TS signal and be on the lookout for a break of the lower triangle trend line (see on weekly chart) if ‘risk off’ sentiment continues.

I will look to LONG the A/U if 'risk on' returns and there is a new LONG TS signal on the 4hr charts. Forex Live has been reporting of buying interest on this pair given the lack of favour of other 'risk on' currencies such as the Euro so, I will be cautious.

A/J: This pair has broken down from a strong support level in the daily 200 EMA. There was the chance though to catch a trend trade signal off this pair from the shorter time frame 30 min charts after the NFP news if you were able to trade during the US session.

I will look to LONG the A/J on a clear TS signal and a break, close and hold back above the daily 200 EMA and if ‘risk on’ sentiment returns.

I won’t SHORT the A/J even though I do have a new TS signal to SHORT this pair on the 4hr chart as price has moved too far from the broken trend line.

G/U: The G/U has held up pretty well given the ‘risk off’ sentiment during the week. I don’t have a TS signal to SHORT this pair at all yet on the 4 hr chart.

I would look to LONG the G/U on a new TS signal and if ‘risk on’ returns.

I would look to SHORT the G/U on a clear TS signal and if ‘risk off’ sentiment remains.

USD/SGD: This pair is now trading within a symmetrical triangle pattern.

I will look to SHORT the USD/SGD on a clear TS signal and if ‘risk on’ sentiment returns.     

I will look to LONG the USD/SGD on a clear TS signal and if ‘risk off’ sentiment remains and if the upper trend line/4hr 200 EMA zone is broken.      

Swissie: I could be tempted to trade this pair if ‘risk off’ remains and I get a new TS signal to LONG as it is also trading near a trend line break.

U/J: I’m wary with this Yen pair.  It traded down on Friday whilst the USD rallied! It is still trading in a down ward channel.

Loonie: The Loonie actually conformed this week. It broke through a resistance level in the 4 hr 200 EMA and monthly pivot zone whilst also giving off a TS LONG signal on the 4hr charts. This all happened after NFP news on Fri night though so, even if I wanted to take this trade, I’d have missed it!

Silver and Gold: These are both still trading within symmetrical triangles on the daily charts. There were smaller moves with TS trend signals on these though from the 4hr charts during the week. The Gold signal also came with a support level break through the monthly pivot and daily 200 EMA zone for added confluence. It gave up to 270 pips! The rising dollar will often result in falling commodity prices. I should have spotted these earlier but didn’t!